Archrock (AROC) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $371.2 million, down 3% year-over-year, while net income rose to $67 million, up 5%, and EPS increased to $0.38; adjusted EBITDA was $213 million, nearly flat year-over-year.

• Signed a major eight-year contract covering 665,000 horsepower, reflecting robust customer demand and long-term partnerships.

• Declared a quarterly dividend of $0.23 per share, up 10% year-over-year, marking the fifth increase in two years and a coverage ratio of 3.1x.

• Completed $800 million redemption of 2028 senior notes and issued $800 million in 2034 notes, improving the capital structure.

• Introduced a long-term capital allocation framework, planning $1.4–$1.6 billion in growth CapEx from 2027–2030 to meet rising demand.

Financial highlights

• Contract operations revenue rose 3% year-over-year to $329.3 million, with adjusted gross margin up 6% to $234.6 million and margin percentage at 71%.

• Aftermarket services revenue declined to $42 million, mainly due to deferred maintenance and lower parts sales; adjusted gross margin was $9.9 million (24% margin).

• Adjusted EBITDA was $213 million, flat year-over-year; adjusted free cash flow was $67 million.

• Six-month revenue reached $745 million, up 2% year-over-year; net income for the period was $140.5 million, up 5%.

• Leverage ratio improved to 2.6x from 3.3x year-over-year; available liquidity at quarter end was $631 million.

Outlook and guidance

• Full-year 2026 adjusted EBITDA guidance tightened to $865–$885 million, reflecting higher make-ready and lube oil costs, reduced aftermarket demand, and higher SG&A.

• Growth CapEx for 2026 reaffirmed at $250–$275 million; total CapEx guidance for 2026 is $400–$445 million, with maintenance CapEx at $125–$135 million.

• Long-term CapEx of $1.4–$1.6 billion planned for 2027–2030 to add approximately one million horsepower.

• Expect to return 25–35% of operating cash flow to shareholders through dividends and buybacks.

• Operating cash flows and credit facility expected to cover liquidity needs for the next 12 months and beyond.